Professional Documents
Culture Documents
PREVIEW OF CHAPTER 18
Intermediate Accounting
IFRS 2nd Edition
Kieso, Weygandt, and Warfield
18-2
18 Revenue Recognition
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1. Understand revenue recognition 6. Allocate the transaction price to the
issues. separate performance obligations.
2. Identify the five steps in the revenue 7. Recognize revenue when the company
recognition process. satisfies its performance obligation.
18-3
OVERVIEW OF REVENUE RECOGNITION
Background
Revenue recognition is a top fraud risk and regardless of
the accounting rules followed (IFRS or U.S. GAAP), the
risk or errors and inaccuracies in revenue reporting is
significant.
18-4 LO 1
OVERVIEW OF REVENUE RECOGNITION
18-6
Performance Obligation is Satisfied LO 1
18 Revenue Recognition
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1. Understand revenue recognition issues. 6. Allocate the transaction price to the
separate performance obligations.
2. Identify the five steps in the revenue
recognition process. 7. Recognize revenue when the company
satisfies its performance obligation.
3. Identify the contract with customers.
8. Identify other revenue recognition
4. Identify the separate performance
issues.
obligations in the contract.
9. Describe presentation and disclosure
5. Determine the transaction price.
regarding revenue.
18-7
THE FIVE-STEP PROCESS
18-8 LO 2
THE FIVE-STEP PROCESS
18-9 LO 2
THE FIVE-STEP PROCESS
Step 5: Recognize
Airbus recognizes revenue of 100 million for the
revenue when
sale of the airplanes to Cathay Pacific when it
each performance
satisfies its performance obligationthe delivery of
obligation
the airplanes to Cathay Pacific.
is satisfied.
18-10 LO 2
18 Revenue Recognition
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1. Understand revenue recognition issues. 6. Allocate the transaction price to the
separate performance obligations.
2. Identify the five steps in the revenue
recognition process. 7. Recognize revenue when the company
satisfies its performance obligation.
3. Identify the contract with customers.
8. Identify other revenue recognition
4. Identify the separate performance
issues.
obligations in the contract.
9. Describe presentation and disclosure
5. Determine the transaction price.
regarding revenue.
18-11
Identify Contract with CustomersStep 1
Contract:
Agreement between two or more parties that creates
enforceable rights or obligations.
Can be
written,
oral, or
implied from customary business practice.
18-12 LO 3
Contract with CustomersStep 1
18-13 LO 3
Contract with CustomersStep 1
Basic Accounting
Revenue cannot be recognized until a contract exists.
Company obtains rights to receive consideration and
assumes obligations to transfer goods or services.
Rights and performance obligations gives rise to an (net)
asset or (net) liability.
Company does not recognize contract assets or liabilities until
one or both parties to the contract perform.
The journal entry to record the sale and related cost of goods sold is as follows.
July 31, 2015
Accounts Receivable 5,000
Sales Revenue 5,000
Cost of Goods Sold 3,000
Inventory 3,000
18-15 LO 3
Basic Accounting ILLUSTRATION 18-4
Basic Revenue Transaction
Margo makes the following entry to record the receipt of cash on August 31, 2015.
August 31, 2015
Cash 5,000
Accounts Receivable 5,000
18-16 LO 3
Contract with CustomersStep 1
Contract Modifications
Change in contract terms while it is ongoing.
Companies determine
whether a new contract (and performance
obligations) results or
18-17 LO 3
Contract Modifications
18-18 LO 3
Separate Performance Obligation
18-19 LO 3
Contract Modifications
Prospective Modification
Company should
account for effect of change in period of change as
well as future periods if change affects both.
18-20 LO 3
Prospective Modification
18-21 LO 3
Prospective Modification
ILLUSTRATION 18-6
Comparison of Contract Modification Approaches
18-22 LO 3
18 Revenue Recognition
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1. Understand revenue recognition issues. 6. Allocate the transaction price to the
separate performance obligations.
2. Identify the five steps in the revenue
recognition process. 7. Recognize revenue when the company
satisfies its performance obligation.
3. Identify the contract with customers.
8. Identify other revenue recognition
4. Identify the separate performance
issues.
obligations in the contract.
9. Describe presentation and disclosure
5. Determine the transaction price.
regarding revenue.
18-23
Separate Performance ObligationsStep 2
Timing of Services
Date of sale (date As time passes or Date of sale or
Revenue performed and
of delivery) assets are used trade-in
Recognition billable
18-24 LO 4
Separate Performance ObligationsStep 2
The license and the consulting services are distinct but interdependent, and
therefore should be accounted for as one performance obligation.
18-26 LO 4
Performance ObligationsStep 2
ILLUSTRATION 18-8 Identifying Performance Obligations
18-27 LO 4
18 Revenue Recognition
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1. Understand revenue recognition issues. 6. Allocate the transaction price to the
separate performance obligations.
2. Identify the five steps in the revenue
recognition process. 7. Recognize revenue when the company
satisfies its performance obligation.
3. Identify the contract with customers.
8. Identify other revenue recognition
4. Identify the separate performance
issues.
obligations in the contract.
9. Describe presentation and disclosure
5. Determine the transaction price.
regarding revenue.
18-28
Determining Transaction PriceStep 3
Transaction price
Amount of consideration that company expects to receive
from a customer.
Variable Consideration
Price dependent on future events.
May include discounts, rebates, credits, performance
bonuses, or royalties.
18-30 LO 5
Determining Transaction PriceStep 3
Most Likely Amount: The single most likely amount in a range of possible
consideration outcomes.
May be appropriate if the contract has only two possible outcomes.
18-31 LO 5
Variable Consideration ILLUSTRATION 18-10
Transaction Price
18-32 LO 5
Variable Consideration ILLUSTRATION 18-10
Transaction Price
Most likely outcome, if management believes they will meet the deadline
and receive the $50,000 bonus, the total transaction price would be?
18-33 LO 5
Variable Consideration
18-34 LO 5
Determining Transaction PriceStep 3
18-35 LO 5
ILLUSTRATION 18-12
Time Value of Money Transaction Price -
Extended Payment Terms
Questions: (a) How much revenue should SEK Company record on July 1, 2015?
(b) How much revenue should it report related to this transaction on December
31, 2015?
Questions: (a) How much revenue should SEK Company record on July 1, 2015?
(b) How much revenue should it report related to this transaction on December
31, 2015?
Entry to record interest revenue at the end of the year, December 31, 2015.
Discount on Notes Receivable 54,000
Interest Revenue (12% x x $900,000) 54,000
Companies are not required to reflect the time value of money if the time period
for payment is less than a year.
18-37 LO 5
Determining Transaction PriceStep 3
Non-Cash Consideration
Goods, services, or other non-cash consideration.
Companies sometimes receive contributions (e.g.,
donations and gifts).
18-38 LO 5
Determining Transaction PriceStep 3
18-39 LO 5
ILLUSTRATION 18-13
Consideration Paid or Payable Transaction Price
Volume Discount
VOLUME DISCOUNT
Facts: Sansung Company offers its customers a 3% volume discount if they
purchase at least 2 million of its product during the calendar year. On March 31,
2015, Sansung has made sales of 700,000 to Artic Co. In the previous 2 years,
Sansung sold over 3,000,000 to Artic in the period April 1 to December 31.
Questions: How much revenue should Sansung recognize for the first 3 months
of 2015?
18-40 LO 5
ILLUSTRATION 18-13
Consideration Paid or Payable Transaction Price
Volume Discount
Questions: How much revenue should Sansung recognize for the first 3 months
of 2015?
Cash 679,000
Accounts Receivable 679,000
If Sansungs customer fails to meet the discount threshold, Sansung makes the
following entry upon payment.
Cash 700,000
Accounts Receivable 679,000
Sales Discounts Forfeited 21,000
18-41 LO 5
18 Revenue Recognition
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1. Understand revenue recognition issues. 6. Allocate the transaction price to the
2. Identify the five steps in the revenue separate performance obligations.
recognition process. 7. Recognize revenue when the company
3. Identify the contract with customers. satisfies its performance obligation.
18-42
Allocating Transaction Price to Separate
Performance ObligationsStep 4
Based on their relative fair values.
18-43 LO 6
Allocating Transaction Price to Separate
Performance ObligationsStep 4 ILLUSTRATION 18-14
Transaction Price
Allocation
18-44 LO 6
18 Revenue Recognition
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1. Understand revenue recognition issues. 6. Allocate the transaction price to the
separate performance obligations.
2. Identify the five steps in the revenue
recognition process. 7. Recognize revenue when the company
satisfies its performance obligation.
3. Identify the contract with customers.
8. Identify other revenue recognition
4. Identify the separate performance
issues.
obligations in the contract.
9. Describe presentation and disclosure
5. Determine the transaction price.
regarding revenue.
18-45
Recognizing Revenue When (or as) Each
Performance Obligation Is Satisfied-Step 5
Company satisfies its performance obligation when the
customer obtains control of the good or service.
18-46 LO 7
Recognizing Revenue When (or as) Each
Performance Obligation Is Satisfied-Step 5
Recognizing revenue from a performance obligation over
time
Measure progress toward completion
18-47 LO 7
Recognizing Revenue When (or as) Each
Performance Obligation Is Satisfied-Step 5
Step in Process Description Implementation
ILLUSTRATION 18-20
Summary of the
Five-Step Revenue
Recognition Process
18-48 LO 7
Recognizing Revenue When (or as) Each
Performance Obligation Is Satisfied-Step 5
Step in Process Description Implementation
18-49 LO 7
Recognizing Revenue When (or as) Each
Performance Obligation Is Satisfied-Step 5
Step in Process Description Implementation
ILLUSTRATION 18-20
Summary of the
Five-Step Revenue
Recognition Process
18-50 LO 7
Recognizing Revenue When (or as) Each
Performance Obligation Is Satisfied-Step 5
Step in Process Description Implementation
4. Allocate the If more than one The best measure of fair value
transaction performance obligation is what the good service could
price to the exists, allocate the be sold for on a standalone
separate transaction price based basis (standalone selling price).
performance on relative fair values. Estimates of standalone selling
obligation. price can be based on
1. adjusted market
assessment,
2. expected cost-plus a margin
approach, or
ILLUSTRATION 18-20 3. a residual approach.
Summary of the
Five-Step Revenue
Recognition Process
18-51 LO 7
Recognizing Revenue When (or as) Each
Performance Obligation Is Satisfied-Step 5
Step in Process Description Implementation
18-52 LO 7
18 Revenue Recognition
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1. Understand revenue recognition issues. 6. Allocate the transaction price to the
separate performance obligations.
2. Identify the five steps in the revenue
recognition process. 7. Recognize revenue when the company
satisfies its performance obligation.
3. Identify the contract with customers.
4. Identify the separate performance 8. Identify other revenue recognition
obligations in the contract. issues.
18-53
OTHER REVENUE RECOGNITION ISSUES
Right of return
Consignments
Repurchase agreements
Warranties
Principal-agent relationships
18-54 LO 8
Right of Return
18-55 LO 8
Right of Return ILLUSTRATION 18-21
RecognitionRight of Return
RIGHT OF RETURN
Facts: Venden Company sells 100 products for 100 each to Amaya Inc. for
cash. Venden allows Amaya to return any unused product within 30 days
and receive a full refund. The cost of each product is 60. To determine the
transaction price, Venden decides that the approach that is most predictive
of the amount of consideration to which it will be entitled is the most likely
amount. Using the most likely amount, Venden estimates that:
1. Three products will be returned.
2. The costs of recovering the products will be immaterial.
3. The returned products are expected to be resold at a profit.
18-56 LO 8
Right of Return ILLUSTRATION 18-21
RecognitionRight of Return
Venden records the sale as follows with the expectation that three products
will be returned:
Cash 10,000
Sales Revenue [9,700 x (100 x 97)] 9,700
Refund Liability (100 x 3) 300
Venden records the cost of goods sold with the following entry.
18-57 LO 8
Right of Return ILLUSTRATION 18-21
RecognitionRight of Return
18-58 LO 8
Repurchase Agreements
18-59 LO 8
ILLUSTRATION 18-22
Repurchase Agreements RecognitionRepurchase
Agreement
REPURCHASE AGREEMENT
Facts: Morgan Inc., an equipment dealer, sells equipment on January 1,
2015, to Lane Company for 100,000. It agrees to repurchase this
equipment on December 31, 2016, for a price of 121,000.
Cash 100,000
Liability to Lane Company 100,000
18-60 LO 8
ILLUSTRATION 18-22
Repurchase Agreements RecognitionRepurchase
Agreement
Morgan Inc. records interest and retirement of its liability to Lane Company
on December 31, 2016, as follows.
18-61 LO 8
18-62 LO 8
Bill-and-Hold Arrangements
18-63 LO 8
Bill-and-Hold Arrangements ILLUSTRATION 18-23
RecognitionBill and Hold
Question: When should Kaya recognize the revenue from this bill-
and-hold arrangement?
18-64 LO 8
Bill-and-Hold Arrangements ILLUSTRATION 18-23
RecognitionBill and Hold
Question: When should Kaya recognize the revenue from this bill-
and-hold arrangement?
In this case, it appears that the above criteria were met, and therefore
revenue recognition should be permitted at the time the contract is signed.
18-65 LO 8
Bill-and-Hold Arrangements ILLUSTRATION 18-23
RecognitionBill and Hold
Question: When should Kaya recognize the revenue from this bill-
and-hold arrangement?
Kaya makes an entry to record the related cost of goods sold as follows.
Cost of Goods Sold 280,000
Inventory 280,000
18-66 LO 8
Principal-Agent Relationships
Agents performance obligation is to arrange for principal to
provide goods or services to a customer.
Examples:
Preferred Travel Company (agent) facilitates the booking
of cruise excursions by finding customers for Regency
Cruise Company (principal).
18-69 LO 8
ILLUSTRATION 18-25
Consignments RecognitionSales on
Consignment
18-70 LO 8
ILLUSTRATION 18-25
Consignments RecognitionSales on
Consignment
18-71 LO 8
Warranties
18-72 LO 8
ILLUSTRATION 18-26
Warranties Performance Obligations
and Warranties
WARRANTIES
Facts: Maverick Company sold 1,000 Rollomatics during 2015 at a total
price of $6,000,000, with a warranty guarantee that the product was free of
any defects. The cost of Rollomatics sold is $4,000,000. The term of the
assurance warranty is two years, with an estimated cost of $30,000. In
addition, Maverick sold extended warranties related to 400 Rollomatics for 3
years beyond the 2-year period for $12,000.
Question: What are the journal entries that Maverick Company should
make in 2015 related to the sale and the related warranties?
18-73 LO 8
ILLUSTRATION 18-26
Warranties Performance Obligations
and Warranties
Question: What are the journal entries that Maverick Company should
make in 2015 related to the sale and the related warranties?
18-74 LO 8
Non-Refundable Upfront Fees
18-75 LO 8
18 Revenue Recognition
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1. Understand revenue recognition issues. 6. Allocate the transaction price to the
separate performance obligations.
2. Identify the five steps in the revenue
recognition process. 7. Recognize revenue when the company
satisfies its performance obligation.
3. Identify the contract with customers.
8. Identify other revenue recognition
4. Identify the separate performance
issues.
obligations in the contract.
5. Determine the transaction price. 9. Describe presentation and disclosure
regarding revenue.
18-76
PRESENTATION AND DISCLOSURE
Presentation
Contract Assets and Liabilities
Contract assets are of two types:
1. Unconditional rights to receive consideration
because company has satisfied its performance
obligation.
CONTRACT ASSET
Facts: On January 1, 2015, Finn Company enters into a contract to transfer
Product A and Product B to Obermine Co. for 100,000. The contract
specifies that payment of Product A will not occur until Product B is also
delivered. In other words, payment will not occur until both Product A and
Product B are transferred to Obermine. Finn determines that standalone
prices are 30,000 for Product A and 70,000 for Product B. Finn delivers
Product A to Obermine on February 1, 2015. On March 1, 2015, Finn
delivers Product B to Obermine.
18-78 LO 9
ILLUSTRATION 18-29
Presentation Contract Asset Recognition
and Presentation
18-79 LO 9
ILLUSTRATION 18-30
Presentation Contract Liability Recognition
and Presentation
CONTRACT LIABILITY
Facts: On March 1, 2015, Henly Company enters into a contract to transfer a
product to Propel Inc. on July 31, 2015. It is agreed that Propel will pay the
full price of $10,000 in advance on April 1, 2015. The contract is non-
cancelable. Propel, however, does not pay until April 15, 2015, and Henly
delivers the product on July 31, 2015. The cost of the product is
$7,500.
18-80 LO 9
ILLUSTRATION 18-30
Presentation Contract Liability Recognition
and Presentation
On receiving the cash on April 15, 2015, Henly records the following entry.
Cash 10,000
Unearned Sales Revenue 10,000
On satisfying the performance obligation on July 31, 2015, Henly records the
following entry to record the sale.
Unearned Sales Revenue 10,000
Sales Revenue 10,000
18-82 LO 9
Presentation
Collectibility
Credit risk that a customer will be unable to pay in
accordance with the contract.
Whether a company will get paid is not a
consideration in determining revenue recognition.
18-83 LO 9
Disclosure
Significant judgments.
18-84 LO 9
Disclosure
18-85 LO 9
APPENDIX 18A LONG-TERM CONSTRUCTION CONTRACTS
18-87 LO 10
APPENDIX 18A LONG-TERM CONSTRUCTION CONTRACTS
18-88 LO 10
APPENDIX 18A LONG-TERM CONSTRUCTION CONTRACTS
18-90 LO 10
APPENDIX 18A LONG-TERM CONSTRUCTION CONTRACTS
Percentage-of-Completion Method
Measuring the Progress Toward Completion
Most popular input measure used to determine the progress
toward completion is the cost-to-cost basis.
18-91 LO 10
APPENDIX 18A LONG-TERM CONSTRUCTION CONTRACTS
Percentage-of-Completion Method
Revenue to Recognized Cost-to-Cost Basis
ILLUSTRATION 18A-1
ILLUSTRATION 18A-2
ILLUSTRATION 18A-3
18-92 LO 10
APPENDIX 18A PERCENTAGE-OF-COMPLETION METHOD
18-93 LO 10
APPENDIX 18A PERCENTAGE-OF-COMPLETION METHOD
ILLUSTRATION 18A-4
18-94 LO 10
APPENDIX 18A PERCENTAGE-OF-COMPLETION METHOD
ILLUSTRATION 18A-5
18-95 LO 10
APPENDIX 18A PERCENTAGE-OF-COMPLETION METHOD
18-96 LO 10
ILLUSTRATION 18A-6
APPENDIX 18A
PERCENTAGE-OF-
COMPLETION
METHOD
ILLUSTRATION 18A-7
18-97 LO 10
APPENDIX 18A PERCENTAGE-OF-COMPLETION METHOD
18-98 LO 10
APPENDIX 18A PERCENTAGE-OF-COMPLETION METHOD
ILLUSTRATION 18A-9
18-99 LO 10
APPENDIX 18A PERCENTAGE-OF-COMPLETION METHOD
18-100 LO 10
APPENDIX 18A PERCENTAGE-OF-COMPLETION METHOD
18-101 LO 10
APPENDIX 18A LONG-TERM CONSTRUCTION CONTRACTS
18-103 LO 11
APPENDIX 18A COST-RECOVERY (ZERO-PROFIT) METHOD
ILLUSTRATION 18A-14
Cost-Recovery Method
Revenue, Costs, and
Gross Profit by Year
ILLUSTRATION 18A-15
Journal Entries
Cost-Recovery Method
18-104 LO 11
APPENDIX 18A COST-RECOVERY (ZERO-PROFIT) METHOD
ILLUSTRATION 18A-14
Cost-Recovery Method
Revenue, Costs, and
Gross Profit by Year
ILLUSTRATION 18A-16
Comparison of Gross
Profit Recognized under
Different Methods
18-105 LO 11
APPENDIX 18A COST-RECOVERY (ZERO-PROFIT) METHOD
ILLUSTRATION 18A-17
18-106 Financial Statement PresentationCost- Recovery Method LO 11
APPENDIX 18A LONG-TERM CONSTRUCTION CONTRACTS
Prepare the journal entries to record revenue and expense for 2014, 2015, and
2016 assuming the estimated cost to complete at the end of 2015 was
$215,436.
18-109 LO 12
APPENDIX 18A LONG-TERM CONTRACT LOSSES
18-110 LO 12
APPENDIX 18A LONG-TERM CONTRACT LOSSES
Prepare the journal entries for 2014, 2015, and 2016 assuming the estimated
cost to complete at the end of 2015 was $246,038 instead of $170,100.
18-111 LO 12
APPENDIX 18A LONG-TERM CONTRACT LOSSES
18-113 LO 12
APPENDIX 18A LONG-TERM CONTRACT LOSSES
18-114 LO 12
APPENDIX 18B REVENUE RECOGNITION FOR FRANCHISES
Franchises
Four types of franchising arrangements have evolved:
1. Manufacturer-retailer
2. Manufacturer-wholesaler
3. Service sponsor-retailer
4. Wholesaler-retailer
Franchises
Two sources of revenue:
1. Sale of initial franchises and related assets or services,
and
18-116 LO 13
APPENDIX 18B REVENUE RECOGNITION FOR FRANCHISES
Franchises
The franchisor normally provides the franchisee with:
1. Assistance in site selection
2. Evaluation of potential income
3. Supervision of construction activity
4. Assistance in the acquisition of signs, fixtures, and equipment
5. Bookkeeping and advisory services
6. Employee and management training
7. Quality control
8. Advertising and promotion
18-117 LO 13
APPENDIX 18B REVENUE RECOGNITION FOR FRANCHISES
FRANCHISE ACCOUNTING
Performance obligations relate to:
18-118 LO 13
APPENDIX 18B REVENUE RECOGNITION FOR FRANCHISES
FRANCHISE ACCOUNTING
Franchisors commonly charge an initial franchise fee and
continuing franchise fees:
18-119 LO 13
APPENDIX 18B REVENUE RECOGNITION FOR FRANCHISES
Identify the performance obligations and the point in time when the
performance obligations are satisfied and revenue is recognized.
Each one is not sold separately and cannot be used with other
goods or services that are readily available to the franchisee.
18-121 LO 13
APPENDIX 18B REVENUE RECOGNITION FOR FRANCHISES
Identify the performance obligations and the point in time when the
performance obligations are satisfied and revenue is recognized.
Tums recognizes revenue for the royalties when (or as) the
uncertainty is resolved.
18-122 LO 13
APPENDIX 18B REVENUE RECOGNITION FOR FRANCHISES
18-123 LO 13
APPENDIX 18B REVENUE RECOGNITION FOR FRANCHISES
Cash 20,000
Notes Receivable 30,000
Discount on Notes Receivable 6,043
Unearned Franchise Revenue 20,000
Unearned Service Revenue (training) 9,957
Unearned Sales Revenue (equipment) 14,000
18-124 LO 13
APPENDIX 18B REVENUE RECOGNITION FOR FRANCHISES
18-125 LO 13
APPENDIX 18B REVENUE RECOGNITION FOR FRANCHISES
18-126 LO 13
APPENDIX 18B FRANCHISE REVENUE OVER TIME
Facts: As an almost entirely service operation (all parts and other supplies
are purchased as needed by customers), Tech Solvers provides few
upfront services to franchisees. Instead, the franchisee recruits service
technicians, who are given Tech Solvers training materials (online
manuals and tutorials), which are updated for technology changes, on a
monthly basis at a minimum. Tech Solvers enters into a franchise
agreement on December 15, 2015, giving a franchisee the rights to operate
a Tech Solvers franchise in eastern Bavaria for 5 years. Tech Solvers
charges an initial franchise fee of 5,000 for the right to operate as a
franchisee, payable upon signing the contract. Tech Solvers also receives
ongoing royalty payments of 7% of the franchisees annual sales (payable
each January 15 of the following year).
18-128 LO 13
APPENDIX 18B FRANCHISE REVENUE OVER TIME
Identify the performance obligations and the point in time when the
performance obligations are satisfied and revenue is recognized.
Each one is not sold separately and cannot be used with other
goods or services that are readily available to the franchisee.
18-129 LO 13
APPENDIX 18B FRANCHISE REVENUE OVER TIME
Identify the performance obligations and the point in time when the
performance obligations are satisfied and revenue is recognized.
18-130 LO 13
APPENDIX 18B FRANCHISE REVENUE OVER TIME
Cash 5,000
Unearned Franchise Revenue 5,000
18-131 LO 13
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18-132